updated 02:10 pm EDT, Fri June 26, 2009

Slim PS3 and X360 Shift

Both Microsoft and Sony are coordinating significant updates to their consoles for the fall, a tip says. Citing the same historically reliable source as for earlier leaks, Ars Technica hears that Sony's slim 120GB PS3 is still on tap for the fall and should be accompanied by a long-awaited price cut. It's not known if this will take place before the new system ships, but Sony is now thought to only have 60 days of stock for the present 80GB model and may leave the 160GB model alone in the market until the revamped model shows.

In a surprise if logical move, however, Microsoft is expected to start phasing out the 60GB Xbox 360 Pro and could remove it from shelves as early as July or August. Multi-game bundles will come online to help sell remaining stock of the system. In its place, the 120GB Xbox 360 Elite will become the only system left and should be cut to the 60GB model's price in early September. A holiday bundle of games should help drive sales as well.

It's not known what if anything will happen to the Xbox 360 Arcade model.

Either company is under pressure to increase capacity and accommodate larger downloadable games and video services, but Sony is facing the greatest risk due to the continued high price of its console. In the US, the PS3 has consistently sold in fewer numbers than other current consoles and has triggered public criticism from Activision Blizzard and EA executives warning that it's harder to continue development for an unaffordable system.

Sony has resisted price cuts earlier this year citing too-high hardware costs and an emphasis on making the PS3 profitable rather than aiming for market share.